Henry Ford once said ‘Before everything else, getting ready is the secret of success.’ The USA is ‘The Land of the Free and the Home of the Brave!’ Its reputation as a country of entrepreneurs remained in place even during the worst of the recent recession. Some would say that the ‘Brave’ certainly applied when there was an average of over half a million new businesses being launched each month during that time. It is a quite astonishing figure bearing in mind how important a solid business plan is for anyone thinking about starting a business. A central part of any business plan is identifying the potential market and during the recession it would certainly have been depressed.
It may be that some decided to set up their own businesses because they had been laid off and knew a particular market well. It was surely a risk unless they had money and contacts behind them? On the surface it might seem that people were thinking that a good idea will work without thinking about what was needed to turn ideas into sales.
The legal requirements of starting up a business have been published and there are plenty of people able to handle that side of things. There is the detail of location, name, furnishing an office and organizing printing, bank accounts etc. It all needs to be done but it is rarely central to business success. The real issues involve a solid financial base, a good idea and market research to reinforce the fact that the idea may find a good market.
There are costs involved in the planning stages. There are also the costs involved in reaching the consumer. Every new business must have the funds to pay those initial costs and support itself before regular revenue streams can possibly be expected. If particular goods and services have always been in demand then the risk is reduced but it is essential to know the current competition. It may have been struggling during recession and some may have failed. That in itself is a warning.
It is common sense to have a strong financial foundation in place before sitting down and devising a marketing strategy. Some have personal money and assets to start out. Others need help and that is an even greater reason for a business plan to persuade would be lenders. The financial detail within the plan will be particularly important. That should include a sales forecast as part of an overall budget of income and expenditure. It must stand up to scrutiny and questions that rise from its figures and assumptions.
Everyone needs an audience. If it is a new company it is customers and the challenge is to reach them with something that catches their attention. Increasingly it is the Internet that provides the best way. An interesting and compelling website forms the basis and regular social media interaction can help to get potential customers looking at the core website. It takes time, effort, expertise and money. Customers simply do not queue outside the door waiting to buy on the first morning that a business opens its doors.
It all sounds doom and gloom. Well it will be without proper preparation. The days of Henry Ford have gone. As he once said ‘Thinking is the hardest work there is, which is probably the reason why so few engage in it.’ There is now a well established and sophisticated market and anyone entering it should be well prepared with their own strategy and finance and aware of the competition already in place. The recession has receded and there is renewed opportunity out there for those that understand the challenges they face.
